Boeing has ties in Europe
that span more than six decades. Here's a look at three examples of how
Boeing works with European firms that have unique and valuable technologies
to help maintain the company's competitiveness in the global marketplace

BY MAUREEN JENKINS

As
a global enterprise with a focus on large-scale systems integration, it's
imperative that Boeing align itself with strong industry suppliers and
partners. Aerospace corporations that offer the expertise and technology
Boeing needs are located around the globe-and many of the company's key
relationships have been forged in Europe.

The continent is home to not only this month's Farnborough Air Show,
which takes place every other year in the United Kingdom, but also many
Boeing customers, some of whom have ties to the company that span more
than six decades. By working with European firms that possess unique and
valuable technologies, Boeing keeps itself competitive in the global marketplace.
This two-way partnership has paid dividends for both sides over the years
in ways that can't be measured solely in terms of platforms built, parts
provided and currency exchanged.

"Certainly, being a partner with Boeing carries significance and recognition
worldwide,” said Gene Cunningham, Boeing Integrated Defense Systems’
regional director for Business Development in Europe. “Someone who
works with us on one program has greater opportunity to work with us on
future programs because they are already known by our teams. If they’re
true partners, they’re helping us shape what the future looks like."

That's certainly the case with the Boeing 7E7 Program, which "is taking
the next step forward on the Boeing goals of global leadership and global
partnering," said Walt Gillette, 7E7 vice president of Engineering, Manufacturing
and Partner Alignment. The program operates a Partner Council composed
of the 12 current partners, with meetings that are held at various Boeing
and team member facilities around the world.

"It's important that the Partner Council members go to each other's place
of work together. That's part of developing a strong relationship," said
Gillette, who in 1997 led Boeing's Airplane Creation Process Strategy
team, designed to reduce the time and costs of bringing new airplanes
to market. About seven of the 7E7's major partners are European, he said.

And because these companies are investing technologies and financial
resources in the 7E7, Gillette said, they have a vested interest in its
success. "Collectively within Boeing, we know more about airplane creation
than anyone else," he said. "However, no matter how smart we are, there
are other smart airplane creation people in the world that can add to
our knowledge. There's a lot of intellectual knowledge Boeing can benefit
from by partnering."

More than 300 European companies in 22 countries serve as Boeing suppliers
and partners. But a small number of these-such as Italy's Finmeccanica
and the United Kingdom's BAE Systems, with whom Boeing has signed far-reaching
Memorandums of Understanding-are called strategic partners.

"Those are arrangements where at a very senior level we have agreed to
discuss the future interests of both companies," Cunningham said. Rather
than talking about specific programs, the firms have "senior executive
endorsement to talk at all levels across the companies to try and find
synergies for creating a positive business future."

He uses the 767 Tanker Transport, the first of which is currently being
built for the Italian Air Force and is scheduled to be operational in
2006, as an outgrowth of such a partnership. Finmeccanica is a partner
in the aircraft’s development and production. Up to 50 of the company’s
engineers have been working with Boeing counterparts in Wichita, Kan.,
and the Puget Sound region of Washington state.

Besides the technical expertise that Boeing and its suppliers and partners
share, there's the more intangible interchange that strengthens both sides.

"You gain a cultural understanding and a root that's not just based on
a single business opportunity," Cunningham said. "You bring back, quite
frankly, long-term relationships that endure. . There's huge value in
collaborative programs because they make you think differently."

With this month's focus on Farnborough, Boeing Frontiers shines a spotlight
on three of the company's key European alliances: RUAG Aerospace in Switzerland;
Umbra Cuscinetti in Italy; and Smiths Aerospace in the United Kingdom.

RUAG AEROSPACE

The Emmen, Switzerland-based RUAG Aerospace found itself in some pretty
elite company this spring, as it was one of 13 companies honored in March
with a Boeing 2003 Supplier of the Year award. Selected from among 10,900
suppliers worldwide and approved through an exhaustive review process,
RUAG was recognized in the Aerospace Support category.

Known as a leading supplier and integrator of systems and components
for commercial and military aircraft, as well as for aircraft maintenance
and upgrades, RUAG is the main source for Boeing F/A-18C/D spares, wedges
and related parts used at the Structural Repair Facility in Mesa, Ariz.
These ailerons-hinged flaps attached to the trailing edge of an aircraft's
wing used to help the vehicle turn or remain level-and other parts have
earned a perfect quality rating thanks to RUAG's exacting quality system.

The
company joined forces with McDonnell Douglas in the early 1990s, when
RUAG's largest customer, the Swiss Armed Forces, began acquiring F/A-18
aircraft. The Swiss Air Force initially bought 34 C- and D-model Hornets
under contract, with the final assembly of 32 of these completed in Switzerland
in RUAG's main Emmen facility. Its work expanded to include the MD-80,
MD-90 and Boeing 717, for which it provides elevators and parts of the
horizontal tail's leading edges.

Being named a Supplier of the Year is "quite a big deal for us," said
Beat Brunner, RUAG executive assistant to the CEO. "Another important
factor and criteria that was looked at was the ability of ours to deal
with rapidly changing environments." The spares and repair business can
be an unpredictable one, Brunner said, because of variances in the numbers
of parts and changes in the parts themselves.

That's why RUAG so quickly embraced Boeing's Lean manufacturing processes.
A Boeing team visited RUAG's main facility two years ago in order to help
the Swiss company streamline and improve its processes. "We had a need
to do something about our costs," said Brunner, a mechanical engineer
and specialist in lightweight structures, tool machines and production
technology. "The 717 elevator and F/A-18 aileron are both hand-labor intense.
We started first in the assembly area [with] Lean initiatives."

Over the past few years, Brunner said, RUAG heavily invested in upgrading
its machine shop and decided to outsource some processes. The work paid
off, as RUAG's commitment to long-term pricing agreements for customers
like Boeing was cited as a factor influencing its Supplier of the Year
award.

As do Boeing's other European suppliers, RUAG has embraced the opportunities
that globalization presents for the firm-and the nation. "Now, the Swiss
government wants long-term participation with Swiss aerospace industry
in international aerospace work," said Brunner, whose firm also supplies
Airbus, Northrop Grumman and General Electric, among others. And RUAG
has accepted the challenge, seeking to expand its aerostructures footprint.
"We have a strategy to develop," Brunner said, "and that strategy is not
just to produce parts, but to develop new products."

UMBRA CUSCINETTI

The products manufactured at Umbra Cuscinetti play critical roles in
keeping Boeing's commercial airplanes flying safely for years. This aerospace
company produces precision ballscrews used on flaps and stabilizers of
747, 737 Next-Generation and 777 airplanes. Located in the heart of Italy
in the Umbria region, the company has been a supplier since 1987 for Boeing
Commercial Airplanes, its largest customer.

With a new 280,000-square-foot facility housed in the city of Foligno,
Umbra Cuscinetti is well-known on the European continent as a primary
subcontractor of aerospace equipment. Priding itself on innovative use
of materials, Umbra Cuscinetti CEO and President Valter Baldaccini said
his firm introduced stainless steel ballscrews to the 777 production process.

"We got some ballscrews back after five years in service, and they were
like brand new," Baldaccini said. "We were the first in the world to do
that. And Boeing used them the first time in the 777."

The Italian company purchased Everett, Wash.-based Northwest Gear more
than five years ago "to better support our major customer in the States,"
Baldaccini said. The renamed company has rack-and-pinion technology and
manufacturing among its core competencies.

"We in this facility in Everett make different products than we make
in Italy," he said of the plant, located about a mile from its largest
customer. "Of course we support Boeing in a good way. We make a daily
delivery to Boeing, like in the car industry."

Baldaccini understands and embraces his business's global nature, even
from his company's base in a pastoral region of Italy. Boeing represents
10 percent of Umbra's sales from its Italian base, but 85 percent of its
U.S.-based revenues.

"The aerospace industry is a global industry," he said, "and the trade
cannot be a one-way street. That's why it's important for Boeing to have
a company like Umbra, because they always choose the best companies [to
work with], wherever they are."

Its recently expanded Foligno facility was built to take advantage of
the latest manufacturing advances, Baldaccini said. "This is a clear sign
of Umbra's willingness to undertake the challenge," he said. The layout
of the new plant has been designed on the Lean manufacturing concept and
streamlining process. One of the keys to Umbra's success is the flexibility
of its personnel in aligning with demanding markets and companies like
Boeing, he added.

In the last five years the company has invested 13 percent of its total
annual sales in research and development and equipment upgrades, Baldaccini
said. This constant innovation and improvement is all designed "to find
the best solution for our customers. This is why we can offer Boeing things
not found in other parts of the world."

SMITHS AEROSPACE

Although
Smiths Aerospace is the largest European-based aerospace equipment company,
its businesses and sales revenues are split nearly evenly between Europe
and North America. And the work this London-based firm does for Boeing
benefits both Commercial Airplanes and Integrated Defense Systems.

In fact, Boeing consistently is one of Smiths' largest customers, as
the company's technical expertise touches "virtually every airplane Boeing
makes in some way," said Mike Grady, vice president of Civil & Military
Air Transport for the Smiths Aerospace operation based in Grand Rapids,
Mich. The company "runs the gamut from being a supplier of bits and pieces
to a partnership role in programs like the 767 Tanker Transport. . Our
futures are mutually joined together on some programs." Smiths provides
flight management systems, landing gear actuation and hydraulic systems,
flight controls, electronics, fuel management systems, primary and secondary
power distribution, avionics systems, and airframe structural components
for Boeing commercial and military aircraft.

In February, Smiths was named to the 7E7 Dreamliner team of major partners,
as the company will provide the airplane's common core system, an integrated
avionics platform that's key to the 7E7's open-systems architecture. Grady
said the company spent five years to develop the technology for which
it spent five months doing verification and validation exercises. Applied
initially to the C-130 Avionics Modernization Program and Italian 767
Tanker Transport, this expertise will shift to the 7E7.

Last month, the partnership with Smiths was expanded to provide the 7E7's
landing gear actuation, including control systems, and the aircraft's
high lift actuation system.

"Unless you bring 85 to 95 percent of the answers to a competition, you
won't win it," Grady said about this "technology re-use." "Nowadays, you
can't [meet] the cost targets if you can't prove what you have and what
you're going to do for the company."

Specialists in both electronics and mechanical systems, the company also
uses its expertise on the Boeing F-15, T-45 Goshawk jet trainer, and F/A-18E/F
Super Hornet programs, on which significant amounts of work are done in
the United Kingdom. (Grady said the company has a "special security agreement"
that allows work on U.S. Department of Defense programs.)

Believers in the Boeing "working together" concept, Smiths Aerospace
employees work alongside their Boeing colleagues in the Puget Sound region,
St. Louis, Mesa, Ariz., and Wichita, and at Smiths' U.S. headquarters
location in Grand Rapids.

Because of the close relationship between the two companies, Grady said,
program spin-offs often make sense. For example, the unmanned aerial vehicle
and unmanned combat aerial vehicle work Smiths is now doing results from
its role as supplier of the 767 Tanker Transport's hose-and-drogue refueling
system.

"We have some interesting, innovative ideas Boeing seems interested in,"
Grady said. "It was much more a relationship issue because Smiths was
not traditionally in the refueling business. We adjusted a business that
had refueling technologies.

"There's a lot of intellectual capital in the aerospace industry in Europe,
and there's a lot of research being done. Being part of this thinking
gives us new products and ideas we offer to our customers."